Bottlenecks to Transformation

Almost every company experiences bottlenecks when looking at Record to Report transformation. These bottlenecks cause severe distress in the decision process and can often lead to companies pushing back any planned investment.

Why would I spend extra money to increase the efficiency of one of my processes over spending that same money on a function that will directly contribute to the growth of my business? This is a very common and valid question most companies ask themselves when looking to transform their R2R process but by just simply analyzing the transformation from a different focus can change your view completely.

The top 3 bottlenecks companies face when looking to transform their Record to Report process:

1. Focusing on other system implementations – One of the most common bottlenecks companies face when looking to transform their Record to Report process is having a greater focus on other system implementations within their office of finance. Companies often put a higher priority on ERP upgrades and investing in consolidation and reporting tools or point solutions prior to automating their financial process.

How to overcome this bottleneck:

The key to overcoming this bottleneck is to focus on the importance of the accuracy of the data being consolidated and reported by these other system implementations. Automation ensures that the process that leads to consolidation has been done with accurate data, supporting documentation, and in full compliance which is critical to the effectiveness of your financial close.

2. Overwhelmed with other financial tasks – Finance and accounting departments can be overly reactive due to the sheer amount of work that is required each month end. Bogged down by the tremendous stress of completing the financial reporting, they often cannot get their head above water long enough to even begin to think about implementing another project.

How to overcome this bottleneck:

Realizing that an automation project doesn’t need to impact the day to day business, as it can be deployed in the background of your daily activities, is key to overcoming this bottleneck. Automating your reconciliations alone will give you extra time to spend on learning new products, otherwise spent working on tedious and manual activities.

3. Lack of Executive Commitment: It is often easiest to get sign off for spending that can be shown to enhance the growth of the business, adding value to the bottom line. These could be projects such as; acquisitions, product growth implementations or business strategies that expand the sales of an organization. Resourcing to the accounting and finance departments, whether that is people or money, is generally not a first priority for most executives looking to expand their business.

How to overcome this bottleneck:

More often than not, executives do not look at this Record to Report transformation with a compliance focus. A noncompliance focus can be exceptionally risky as it can lead to hefty fines and reputational damage that often cause greater risk in the organization down the line. Viewing this transformation as a way to enhance the overall business by reducing overhead costs and increasing analytics for business improvements will help to better position the transformation to the executive team.

To conclude, a recent poll was taken from our last few webinars, asking the question: “If you don’t have a Global R2R Solution, what is holding you back?” (Cost was specifically not listed). The results displayed further solidify the top bottlenecks companies face when looking to transform their R2R process. The key to overcoming each of these bottlenecks is identifying the value that can be delivered internally from this transformation and communicating it in relation to the overall strategy and direction of your company. Also worth noting from the results is that a third of the companies we speak with have recognized the important benefits of transforming their R2R process, and as such, are looking to start the project within the next 12 months.